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Fires deliver economic blow to Sonoma County businesses, workers

Damage at the Hilton Hotel off Fountaingrove Parkway after Tubbs Fire burned through north Santa Rosa, California on Monday, October 9, 2017. (Alvin Jornada / The Press Democrat)

ROBERT DIGITALE AND BILL SWINDELL,

Two days after the Tubbs fire incinerated his Fountaingrove home, La Tortilla Factory CEO Jeff Ahlers returned to work and oversaw efforts to put the 40-year-old Santa Rosa food manufacturer back in operation.

With electricity restored but natural gas service still interrupted at the plant off Airport Boulevard, Ahlers and a small team Wednesday began contacting the company’s employees. They wanted to learn who lost their homes, who had been forced out by evacuations and who remained busy helping other relatives cope with disaster.

The team also sought to assure employees eager to get back to work and earn a paycheck.

Willie Tamayo, who also lost his home in the fire and is a member of the family that owns La Tortilla Factory, suggested the push to reopen was much more important that merely keeping its tortillas on supermarket shelves. The company employs 300 workers, Tamayo said, “and they’re all counting on us.”

Last week’s raging fires not only stole lives and ravaged neighborhoods in Santa Rosa and the surrounding region. The flames also punched the city’s business community in the gut.

The Tubbs fire destroyed two hotels, a winery, a department store and at least a half-dozen restaurants. Moreover, the threat of further damage upended the operations of both large and small employers — closing hospitals, schools, shopping centers, tech companies, food producers and many other businesses.

The disruption didn’t cost only business owners or their investors. It also affected thousands of workers, some of whom won’t be fully repaid for their days off the job. The property losses and the blow to the local economy have yet to be tallied. But analysts said the scale will be historic, something along the lines of the 1906 earthquake, which leveled much of a Santa Rosa downtown that had served a small farming community.

“It definitely is unprecedented for the county,” said Sonoma State University economist Robert Eyler. Such a combined impact to residents and businesses “has not been seen in at least two or three generations.”

And while the fire’s first impact was to temporarily shut down business, the aftermath may include “some labor market shakeup” as employees quit jobs to leave the area or take new positions with more pay or better working conditions.

The homes and apartments lost in an already tight housing market could make it harder for many residents to stay in the county.

“The bigger problem is really going to be for the workers,” Eyler said.

As of last week, a complete count had yet to be made of Santa Rosa businesses destroyed or damaged by fire — let alone the many others that had been scorched from Geyserville to the Sonoma Valley.

“I don’t think anybody yet knows the extent of it,” said Jonathan Coe, director of special projects at the Santa Rosa Metro Chamber of Commerce.

A six-member chamber team met Wednesday to begin planning their outreach to area businesses, even as four of those present were dealing with current or possible evacuations affecting their own homes.

In Santa Rosa, the commercial properties destroyed included the Hilton Sonoma Wine Country, the Fountaingrove Inn, the Kmart department store and the neighborhood shopping center on Stagecoach Road in Fountaingrove that housed Sweet T’s restaurant. At least six more restaurants burned in or near the city.

Also, two modular buildings were lost at Keysight Technologies’ Fountaingrove facility, though company officials said key production and office facilities received only minor damage. And the buildings at Paradise Ridge Winery in Fountaingrove were ruined, along with 10 North Coast wineries that were severely damaged or destroyed.

In Santa Rosa, it seemed that most major employers shut down for at least a few days, sometimes from lack of utilities or from the disrupted lives of their workers. Coe suspected that many who stayed in operation did so with skeleton staffs.

For the retail sector, the Coddingtown shopping center in west Santa Rosa lacked electrical power from early Monday until about 7 p.m. Tuesday.

Coddingtown and the downtown Santa Rosa Plaza shopping center both opened for business Wednesday. But about 30 stores at the Plaza remained closed last week, including Abercrombie & Fitch, Victoria’s Secret, Zales jewelers and the AT&T store. A spokeswoman for the two centers advised shoppers to call ahead for specific store openings.

Two locally owned restaurant groups last week were working to get their eateries back in operation, even as they faced the loss of other properties.

Santa Rosa’s Stark Reality Restaurants, owned by Mark and Terri Stark, lost one of its six establishments, Willi’s Wine Bar on Old Redwood Highway. As with hundreds of homeowners, the Starks said Wednesday they had not yet been permitted to survey the building’s remains.

“We’re just kind of focusing on getting our other restaurants open so people can have a good meal and a drink,” Terri Stark said. The staff from Willi’s Wine Bar was being dispersed to the company’s other restaurants, and the existing workers for those establishments at times will be “dropping one shift so someone else can have it.”

Similarly, Santa Rosa’s Chandi Hospitality Group, which owns 11 restaurants, lost its Mountain Mike’s Pizza on Cleveland Avenue.

Sonu Chandi, the company’s president, said Wednesday his family members were trying to reopen their other restaurants, even as he personally faced the threat of evacuation from his home in southeast Santa Rosa. That day one of their downtown eateries, Beer Baron on Fourth Street, offered free lunches and dinners of hamburgers and hot dogs.

Chandi insisted the family would reopen the destroyed pizza restaurant.

“We’re going to rebuild,” he said. “And the Chandis are not going anywhere. We’re going to do whatever it takes.”

Angelo Ferro, the San Rafael investor who owns the Fountaingrove Inn on Mendocino Avenue, said he would like to rebuild, depending how his insurance settlement pans out. The 124-room hotel was destroyed by fire, putting 90 employees out of work.

He estimated the hotel suffered at least $25 million in damage. Ferro, who bought the property in 2003, said he was on the verge of improving the property so a walkway would connect the hotel with the nearby historic Round Barn, also consumed by flames.

“It was my dream,” he said.

While tourists have stopped flocking to the area, hotels aren’t likely to take that big of a hit because they are being filled by local evacuees whose homes were destroyed, said Ben Stone, executive director of the Sonoma County Economic Development Boards. Stone’s own home burned down and he was temporarily staying with a friend.

The fires also came at the tail end of the tourist season, so hotels would be expected to have fewer bookings, he said.

One Santa Rosa hotel that stayed closed last week was the Flamingo Hotel near Fourth Street and Farmers Lane. The hotel, located in a mandatory evacuation zone that extended from Rincon Valley to west Santa Rosa, reopened Sunday.

“My main concern is that we get our employees back to work, but when it’s safe,” Don Hamilton, the Flamingo’s front office manager, said last week.

Employees who miss work days because of fires can file a state unemployment insurance claim at edd.ca.gov/eapply4ui. However, that benefit only covers a portion of lost wages up to a maximum of $450 a week, a county spokeswoman said.

In Wine Country, the fires will result in a lower yield for the 2017 grape harvest, analysts and vintners said. Areas around Atlas Peak and Mount Veeder regions in Napa County are expected to see sharp declines in grape yields, particularly cabernet sauvignon and peitit verdot.

Along with the damage to winery buildings, concern is growing over the amount of vineyard acreage that has burned or been severely damaged. For example, Potter Valley in Mendocino County suffered losses to vines on at least five properties totaling about 200 acres. It takes anywhere from three to five years for a replanted vineyard to start producing fruit again.

“You’re talking about five years of not having revenue coming in,” said Rob McMillan, founder of Silicon Valley Bank’s wine division based in St. Helena.

Among Santa Rosa’s large employers, Amy’s Kitchen reopened its food plant on Northpoint Parkway on a limited schedule Thursday, a spokeswoman said. The company employs more than 860 people in the county, mostly in Santa Rosa.

Amy’s owners Andy and Rachel Berliner said staff was surveying workers who had lost homes.

“We are working to deliver direct support to these employees,” the Berliners said in a statement.

Another major employer, electronic measurement device maker Keysight Technologies, has taken several steps on behalf of its 1,300 workers in Santa Rosa.

Keysight, the biggest company headquartered in the county, announced it will pay full wages for workers off last week while the campus was closed. It also will provide $10,000 to employees who lost homes and $1,000 for those in need of emergency housing.

And the company has established an off-site employee relief center in the city where its workers and their families can get a free meal, drop off or receive donated items and simply hang out with colleagues, said CEO Ron Nersesian.

Keysight has 11,000 employees around the world, and many of them have reached out to ask how they can help the affected workers in Santa Rosa.

“People are concerned about their fellow employees, Nersesian said.

Several business leaders suggested the region’s fires struck at a time of relative strength for the local economy.

Al Lerma, business development director at the county’s Economic Development Board, recalled how a few weeks back colleagues were discussing that the county’s low unemployment, rising home prices and general outlook would be the envy of most any other place around the nation.

“We were all sitting around talking about how this economy is humming all well, and the only thing that could throw us off would be a natural disaster,” Lerma said.

Across Santa Rosa, owners of both homes and businesses are looking at the possibility that recovery could take years. But the community has a history of rebuilding. Coe noted the chamber of commerce was formed here to help the community recover after the 1906 earthquake.

“This is in our genetic makeup and we will lead the way again in doing that,” he said.

In the short term, owners and company executives said they will be looking for ways to care for their workers.

“When something like this happens, we all kind of hurt together,” said Alhers of La Tortilla Factory.

You can reach Staff Writer Robert Digitale at 707-521-5285 or robert.digitale@pressdemocrat.com. On Twitter @rdigit.